After nearly two decades of legal disputes, the European Court of Justice (ECJ) has ruled in favor of U.S. tech giant Intel, annulling a €1.06 billion fine imposed by the European Commission (EC) for antitrust violations.
The ruling emphasizes that the Commission must provide more substantial evidence when determining whether loyalty rebates are anticompetitive. This decision comes after the ECJ confirmed a lower court’s annulment of the Commission’s 2009 ruling that accused Intel of abusing its dominant market position.
The case revolved around rebate schemes that Intel offered to computer manufacturers such as Dell, Hewlett-Packard, NEC, and Lenovo, which required them to purchase Intel’s x86 CPU chips exclusively. The Commission had argued that these rebates effectively stifled competition from rival chipmaker Advanced Micro Devices (AMD), relying on a presumption that such rebates would have negative effects on the market.
However, in its ruling, the ECJ stated that the Commission must analyze the actual impact of the rebates on competition, rather than assume their illegality. The judges noted that while loyalty rebates from a dominant company may violate Article 102 of the Treaty on the Functioning of the European Union (TFEU), the Commission must consider evidence presented during investigations that may demonstrate the rebates did not restrict competition.
The court added that the Commission’s analysis should encompass not only the company’s dominant position and the market share covered by the rebates but also the rebates’ duration, amount, and any strategies aimed at excluding equally efficient competitors from the market.
“This ruling is a significant endorsement of an effect-based approach, which will have far-reaching implications,” stated Assimakis Komninos, a partner at White & Case, highlighting the need for the Commission to present evidence in such cases. He noted that the judgment contradicts recent Commission guidelines, which favored a presumption-based approach to loyalty rebates.
In response to the ruling, the Commission simply acknowledged the ECJ’s decision in a statement.
While this ruling marks a potential conclusion to Intel’s long-standing legal battle with the Commission regarding rebate schemes, the saga continues. Another case is still pending before the European judges concerning allegations that Intel paid computer manufacturers to delay the launch of products featuring competitors’ chips.